Friday, November 24, 2006

Russia attacks the West's Achilles' heel - Asia Times

David Seaton's News Links

All the 1990's enthusiasm for "shock therapy" and stripping Russia's assets, economic, historical and geopolitical, has come to this. The collapse of the USSR was a catastrophe for the average Russian... If you kick a man when he is down, he won't soon forgive it. The policies followed by the Clinton administration in Russia were every bit as stupid and shortsighted as Bush's policies in Iraq. DSAbstract: Russia has found the Achilles' heel of the US colossus. In concert with its oil-producing partners and the rising powerhouse economies of the East, Russia is altering the foundations of the current US-led liberal global oil-market order, insidiously working to undermine its US-centric nature and slanting it toward serving first and foremost the energy-security needs and the geopolitical aspirations of the rising East. All this is at the impending incalculable expense of the West. What is increasingly at stake is secure US access to global energy resources - strategic US energy security - because the West's traditional control respecting those global resources is seriously faltering in the face of the compelling strategies undertaken by Russia and its global partners. The US giant is increasingly at risk as it faces what is gradually but now more widely being recognized as Russia's clever exploitation of US foreign energy dependency and the hemorrhaging of its all-important economic-geopolitical capital: its traditional global energy leadership and dominance via its onetime virtually all-pervasive oil majors.(...) But it is crucial to understand that the West's immunity from a targeted embargo is assured only as long as the current liberal, highly liquid US-led global oil market is unwaveringly adhered to. Once the movers and shakers (now Russia and its producing and consuming partners) begin again to revert to the rigid bilateral long-term supply contracts conducted privately between producers and consumers, thereby incrementally altering the foundations of the global oil-market order by decreasing its level of liquidity, then the real potential for a revoking of a significant measure of oil's fungibility exists. This means that the ability to enact an effective targeted embargo is once again incrementally revived. A meaningful loss of fungibility of oil would spell potential economic-geopolitical doom for the West. This is the Achilles' heel of the West. As we shall see, it is that very Achilles' heel Russia and its partners have found and are already energetically exploiting in a bid to shift the US colossus out of its current position of global dominance. Swiftly mounting anxiety on the part of increasing numbers of the globe's key energy-hungry economies in the East as respects energy security is already fueling incremental abandonment and circumvention of the US-dominated liberal global oil market. READ IT ALL